Last post on Jan 28, 2013 at 5:55 PM
You are in the Sedans
What is this discussion about?
Audi A8, BMW 7 Series, Jaguar XJ-Series, Lexus LS 460, Mercedes-Benz S-Class, Volkswagen Phaeton, Maserati Quattroporte, Mercedes-Benz CL-Class, Sedan
Let's try to define this forum as being limited to luxury performance vehicles where the mainstream version in a typical configuration has an MSRP of at least $60k.
A luxury vehicle with a base price of $59k qualifies because it would typically be bought with some additional equipment, bringing the MSRP over $60k.
Vehicles like the E, 5, A6, M, or GS, even if available in certain versions over $60k, don't qualify because they are cars from companies that have higher end cars in their lineups.
#10245 of 24726 MB in the press
Aug 13, 2005 (3:22 pm)
Did any of you folks catch the cover story on MB ("Dark Days at Daimler") in the 8/15 issue of BusinessWeek? It's now available online at www.businessweek.com (search for "Mercedes" and you'll see the article; online registration is required but is free).
The article pretty clearly "connects the dots" as oac would say. Here's some salient quotes:
"Beset with humbling quality problems, a money-losing small car business, and high production costs, Mercedes has gone from being the global benchmark for quality and one of the most profitable auto makers in the world to a money-losing shambles. For the first half of 2005, the premium carmaker lost $1.1 billion. Clearly, Zetsche will have his work cut out turning Mercedes around."
"Worse, the quality fiasco has taken a heavy toll both in Europe, which accounts for 76% of sales, and in the U.S., where the auto maker sells 21% of its vehicles. Mercedes' European market share slipped to 4.2% in the first half of 2005, down from 4.5% for the same period in 2004."
"Wooing back customers will also mean putting some zing in the model lineup. New models are in the pipeline, including the vaunted S-Class sedan, which will be unveiled in September, and the new M-Class sport utility vehicle -- and not a moment too soon: Sales of two of the company's key profit engines, the E-Class and C-Class, have plunged 30% to 35% this year, buffeted by reports of quality problems."
Boy, does Zetsche have a big job cut out for him. The question is will Cordes stick around to be part of the solution.
#10246 of 24726 Re: MB in the press [garyh1]
Aug 13, 2005 (3:45 pm)
Yet you read this board and it seems impossible for some to accept the evidence. MB has focused on performance for the last 10 years while its bread and butter cars have fallen apart. The sexy performance gets the headlines in the car rags, who by the way never seem to point out how badly or how far the mainstream buisness has fallen off. It also leads to some bragging here, bragging that is meaningless and is all about cars that make up less than 1.5% of sales. I guess its great that MB has high performance cars that people can buy. But I think 99% of its past buyers wished they'd focus on building quality stock cars instead. But that' means they get boring again. Boring and profitable again - if they do it right. But I don't see them ever being in the enviable position they occupied for so long. Everything is much more sophisticated now and there's simply too much competition, too much quality and too much of a dependency on something the Germans don't execute well - electronics.
I doubt you'll see Cordes back. He's a cost cutter more than a visionary from what I've read and I'd expect that Ford or GM will snap him up. His work is cut out for him at Benz if he came back or the other two if they offer him a job. Better to accept the top job at a bigger company than a secondary one at a smaller one that just passed him over.
#10247 of 24726 Re: MB in the press [ljflx]
Aug 13, 2005 (4:00 pm)
bragging here, bragging that is meaningless and is all about cars that make up less than 1.5% of sales. I guess its great that MB has high performance cars that people can buy. But I think 99% of its past buyers wished they'd focus on building quality stock cars instead.
Very well put. MB is "better" than Lexus for the 1.5% of people that buy AMG vehicles, where Lexus doesn't compete. But is it better in mainstream luxury vehicles?
#10248 of 24726 Re: MB in the press [syswei]
Aug 13, 2005 (4:48 pm)
"Sales of two of the company's key profit engines, the E-Class and C-Class, have plunged 30% to 35% this year, buffeted by reports of quality problems."
This is another interesting tidbit as it refutes another point some on the board make, that being German car buyers will put up with problems and make reliability a lesser issue. Again this is certainly true at Porsche and to a large extent BMW. But MB has never really attracted the performance buyer. So a blanket statement like that is hardly accurate.
But here's what I've been trying to put across to Merc1. You read a story like that and you still have no hesitation to drop $60-100K on one of their cars? Merc's point is historic MB buyers will not be influenced or may not even know. How? It's everywhere. But let's just say you are one that has been hit by the recalls, the repair bills and the inconveniences of seeing dealer serrvice too often or know a few too many people who have that experience. Still no hesitation? I doubt it because the capital requirement is far too heavy. I think a hidden problem in all this is that MB has lost some core customers at the top end and gained some entry level lux customers who always aspired to own a Benz at that low end. But now its not the quality brand of its past legacy. Proof - I have none but I'd bet a lot of money on it.
Syswei - this is why I made the statement last year or last winter that MB would lose its throne status position in the future. I still think both BMW and Lexus will pass them in a few years. I said at the time I thought the problems would get much worse. I think they are heading for worse times still. You'll likely see some hairdressing in the next two quarters - usually played out with adjustments in intercompany charges and things like that - to make the new CEO look good. I know as I've been there and done that and it happens with all internal charges to prop up an ailing divisions profits. But that is not sustainable and the business will have to break through at some point.
#10249 of 24726 Re: MB in the press [ljflx]
Aug 13, 2005 (5:00 pm)
MB would lose its throne status position in the future. I still think both BMW and Lexus will pass them in a few years.
Well certainly in pure unit sales they've already been dethroned. As far as prestige, well I agree that it could happen, but imho it will take more than a few years. Brand equity built over a 120 year period imho would probably take more than 10 years to be destroyed. There is still time for MB to get its act together.
#10250 of 24726 Re: MB in the press [garyh1]
Aug 13, 2005 (6:57 pm)
I am a businessman and I think it is underestimated by most people what a feat it was for Toyota to enter the luxury segment, where they were not even an afterthought, and gain this level of market penetration in a relatively short time. I can only think of Rolex as one other example that comes close.
But now that Lexus is one of the Big Boys, I think the road ahead will be much more difficult. When you are the benchmark in many people's eyes, mistakes are not forgiven easily. You are expected to lead, not follow (not saying that they are following in everything, but we all must admit they followed MB for years just to get established).
Lexus is flush with cash, but that is not always a good thing when it comes to innovation and customer service. It seems to me that the fat cats always forget what got them there and find a way to somehow blow it.
The competition between the luxury makes have resulted in some truly wonderful automobiles in just the past few years. I hope this trend continues 'cause we consumers surely benefit from it.
#10251 of 24726 Re: Lexux? [jtbenz]
Aug 13, 2005 (8:47 pm)
Don't confuse the Lexus ES300 with the Lexus LS430. The performance of the LS430 with 295HP (2005) and six speed transmission is far from being a laggard. All Lexus models are thot to be luxury cars; however, the LS430 is a car in it's own class and should not be compared to the other Lexus cars.
#10252 of 24726 Re: MB in the press [garyh1]
Aug 13, 2005 (10:20 pm)
BTW, after catching up on my reading in the Luxury Performance Sedans forum, I just discovered that this article had been mentioned by others, citing a reprint of the Business Week article on MSNBC.msn.com that doesn't require a registration to read:
Dog Days at Daimler
I was truly interested in Merc1's impression of the article, but he had already responded to it there-- sorry, Merc1, but I'll leave it to you whether you want to say something different here or just repost your previous response on LPS here for those who don't follow the other forum.
#10253 of 24726 Re: MB in the press [stomp32]
Aug 14, 2005 (10:08 am)
As a LEXUS owner...I don't expect LEXUS to lead in anything but quality... l like the idea that they study new innovations..Perfect them and THEN put them in their cars..
In those cases where they do HAPPEN to lead I expect NO loss of quality...Hybrids are a good example...if they make a Hybrid LS...It better be perfect...
As to the looks of the car...I don't want a space ship...I don't want Ugly...I want a nice conservative timeless design that I would get tired of looking at in a couple of years.
The Cars Attribute..I bought an LS...I want luxury...A great sound system, A nice comfortable smooth and quiet ride...All the proven safety features...and Electronics that are easy to use and understand...LIKE THE LEXUS GPS system, and the radar/laser cruse control. I don't need a race car but it has to handle well and lexus definately does, Without sacrafice to that Smooth Quiet Ride. I want an attractive comfortable interior...I like wood and leather...Don't like Crome or Aluminum or stainless steel, it is too cool feeling...I want to be at home in my car Comfortable and pampered in every way....AND LEXUS DELIVERS...
If Lexus ever gets caught up in the Rush technology to the market race they will sacrafice quality...and without the quality they might as well be a lowly Mercedes.
Aug 14, 2005 (11:44 am)
I have an ultra, and there are alot of things I have taken for granted over the years...One small thing is the mirrors fold in when the car is parked...I noticed the b,mw 7 did not do that nor did it have the cool seat function although it did have perforated seats with a fan ...I sure wish Lexus would introduce the new Lexus quicker than a year, and if they did so I would wait...Tony PS. The Mercedes 500s is going to be above a hundred thousand nicely equipped--imo--and it would probabley take a long time to get, and with the reliability problems I rule that out completely. I think I would just as soom have a Bentley if I could take the dings that would be coming